Lonza Reaffirmed at Outperform as RBC Notes Tight Supply, Demand in Biologics
RBC Capital Markets reiterated its outperform rating on Lonza Group (LONN.SW) as it updated its biological manufacturing capacity model for contract development and manufacturing organizations and pharmaceutical companies over the next five years. "Lonza sits at the CDMO peer median on 2027E EV/EBITDA despite being the largest, most diversified, and fastest-growing name in the group. The stock has derated for two years even as earnings have grown c.20% pa. Supply-demand in biologics and ADCs remains tight, governance has improved materially, and the regulatory track record is strong," analysts wrote in a Tuesday note. "The absence of a near-term catalyst may discourage momentum capital, but we believe provides an attractive entry point for longer-term investors." Supply and demand in biologics are expected to be "matched tightly" from 2026 until 2029, after which demand is forecast to outpace supply. "We conclude that the market needs to see a further $30bn of investment over the next 2-3 years in order for supply to keep up with demand in the early 2030s," the research firm noted. Lonza's core EPS is projected to grow 20% annually over the 2025 to 2028 period. The price.
RBC Capital Markets reiterated its outperform rating on Lonza Group (LONN.SW) as it updated its biological manufacturing capacity model for contract development and manufacturing organizations and pharmaceutical companies over the next five years. "Lonza sits at the CDMO peer median on 2027E EV/EBITDA despite being the largest, most diversified, and fastest-growing name in the group.
The stock has derated for two years even as earnings have grown c.20% pa.
Supply-demand in biologics and ADCs remains tight, governance has improved materially, and the regulatory track record is strong," analysts wrote in a Tuesday note. "The absence of a near-term catalyst may discourage momentum capital, but we believe provides an attractive entry point for longer-term investors." Supply and demand in biologics are expected to be "matched tightly" from 2026 until 2029, after which demand is forecast to outpace supply. "We conclude that the market needs to see a further $30bn of investment over the next 2-3 years in order for supply to keep up with demand in the early 2030s," the research firm noted.
Lonza's core EPS is projected to grow 20% annually over the 2025 to 2028 period.
The price.